Birst raises $26M for BI that straddles SaaS and servers

Birst, a San Francisco-based business intelligence company with its roots in the cloud, has raised $26 million from Sequoia Capital, Hummer Winblad and DAG Ventures. Until today, the company, which launched in 2004, has been relatively mum about its funding other than noting that it raised more than $10 million at some point in 2008. But Birst’s recent boldness on the product side has paid off, so perhaps it figures a little chest-pounding around its investors can’t hurt either.

The company has always been among the leaders in the world of software-as-a-service BI offerings, competing against the likes of GoodData and Bime Analytics, but in late 2011 it began venturing outside its comfort zone by actually selling software. First was an on-premise version of its flagship BI application in September, followed by its very own in-memory database in December. Those decisions were bold — selling software is an entirely different business from selling cloud services — but Birst CEO Brad Peters said at the time he was confident they’d pay off because the company was applying the lessons of SaaS design to traditional software.

It appears he was right. When discussing Birst’s latest funding during a recent call, Peters said the in-memory database “has been a significant chunk of our revenue in the last two quarters” and that on-premise software in general now comprises about half the company’s revenue. Overall, Birst has seen revenue double over the past year and its customer count rise by more than 40 percent.

In 2012, however, no BI story would be complete without a big data hook, and Birst certainly has one. Yes, it’s got the Hadoop integration that pretty much every BI vendor has in order to help users actually analyze all their unstructured data, but it also has a deep integration with analytic database provider ParAccel that Peters said was directly responsible for multiple customer wins in the last quarter. By the year’s end, he suggested, Birst is planning to release its own product that changes the way big data is done.

Having the right tools available for doing big data jobs is critical, Peters said, because big data has changed the way data analysis is done. Whereas it used to be like mining for gold with a pick axe and grabbing the big hunks of unrefined material, it’s now like strip mining in that companies must pore through entire mountains of data just to find the relatively small amounts of valuable material, which they then need to refine.

When one looks at the size of the overall BI market — $12 billion and growing — it’s easy to see why Birst and its investors are confident. There’s a large population of customers that want great BI and big data tools but that can’t afford the likes of Teradata, IBM or SAP software or hardware. In the on-premise world, however, Birst does have to concern itself with next-generation vendors Tableau and QlikTech, which are both making hay at the expense of incumbent BI vendors.

Which is why Birst thinks its cloud roots remain very important. In the cloud, said Peters, “the entrenched players really have no existing answer.”